BIM52795 - Care providers: qualifying care relief: shared lives carers: examples

Example 1

During the 2023-24 tax year Mrs Jones provides kinship care to a group of triplets aged five and their cousin aged twelve for the whole year. No other shared lives carer or foster carer lives in the house. Her annual accounting date is 5 April. Her qualifying amount will be made up as follows:

	Amount
Fixed amount	£18,400
Child 1 (52 x £375)	£19,500
Child 2 (52 x £375)	£19,500
Child 3 (52 x £375)	£19,500
Child 4 (52 x £450)	£23,400
TOTAL	£100,300

Note that the triplets are regarded as a single placement for the purposes of the shared lives placement cap. Therefore, the cap is not exceeded.

If Mrs Jones had total receipts from kinship care of £110,000 and incurred allowable expenses of £85,000, she could choose between being taxed on:

• £25,000 (£110,000 receipts less £85,000 expenses) using the profit method, or
• £9,700 (£110,000 receipts less £100,300 qualifying amount) using the simplified method.

On the other hand, if Mrs Jones had total receipts from kinship care of £90,000 for the year, then the full amount would be exempt because her total receipts are less than her qualifying amount.

Example 2

During the 2023-24 tax year Mr and Mrs Khan operate a partnership and provide shared lives care for two adults aged 40 and 52. The first has been with them for the full year and the second for 40 weeks. Their annual accounting date is 5 April. Their qualifying amount is made up as follows:

	Amount
Fixed amount	£18,140
Adult 1 (52 x £450)	£23,400
Adult 2 (40 x £450)	£23,400
TOTAL	£64,940

Mr and Mrs Khan received £50,000 (£25,000 each) for the provision of shared lives care for the year. As this is below the qualifying amount, they will both be exempt.

Example 3

During the 2023-24 tax year, Mrs Chan provides foster care for two children aged 8 and 12, staying put care for one young adult aged 19 and adult placement care for an adult aged 26. All have been with Mrs Chan for the full year and her annual accounting date is 5 April. No other shared lives carer or foster carer lives in the house. Her qualifying amount is made up as follows:

	Amount
Fixed amount	£18,140
Child 1 (52 x £375)	£19,500
Child 2 (52 x £450)	£23,400
Adult 1(52 x £450)	£23,400
Adult 2 (52 x £450)	£23,400
TOTAL	£107,840

Note that the foster children are not counted for the purposes of the shared lives placement cap. As such, the cap is not exceeded.

Mrs Chan receives £35,000 for the provision of foster care in the year and £55,000 for the provision of shared lives care. Her profits are therefore exempt as her total receipts of £90,000 are less than her qualifying amount.